4.5 Gift Acceptance Policy
The following policies and procedures are set forth: (a) to spell out hereinafter the working rules for the acceptance of gifts and pledges for Evanston Public Library (the Library; (b) to protect the Library, its Board of Trustees (the Board), staff and volunteers from inappropriate or undesirable gifts and pledges; and (c) to inform the Library’s donors and prospective donors. An attorney or other qualified individual and the Board will review this policy every two years in order to ensure accurate reflection of current laws.
4.5.1 General Procedures and Guidelines
The Library welcomes expressions of interest and financial support, regardless of size or form, from any individual, family, business, corporation, foundation, or similar source.
The Library accepts both restricted as well as unrestricted gifts providing that donor restrictions do not significantly diminish the value of the gift.
The staff and volunteers are available to meet with any prospective donor(s) and their financial advisors, without obligation, to discuss areas of interest, the plans of the Library, types of gift commitments, options for payment, estate planning, and the tax planning consequences of a possible gift commitment so as to provide every possible assistance to a prospective donor.
However, unrestricted gifts of cash or negotiable securities are the forms of donor commitment that will have the greatest impact on the Library and its future plans.
Gifts to the Library should be made in the name of Evanston Public Library and will be taken, held and administered by the Board. All gifts to the Library should be directed to the Library Director or Administrative Services Manager where they will be accepted, acknowledged and administered in accordance with the policies of the Board.
No solicitation of donations or gifts of funds or real property for the benefit of the Library shall be made by anyone without the approval of, the Library Director or his/her designated representatives.
Donors will be notified by the Library if they receive any benefits in exchange for the gift that are more than 2% of their gift.
During any major gift initiative period, prospective donors may be asked to make an unrestricted annual gift commitment and a major gift commitment to Library. In some cases, prospective donors may also be asked to consider a deferred or planned gift to the Library.
Commitments to the Library and/or payment of same may take the form of one, or a combination, of the following:
• Multi-year pledges
• Appreciated securities or other personal assets
• Deferred or planned gifts including:
• Insurance policies
• Gifts of residence with or without a retained life interest
• Bequest intentions
• Requests by donors for anonymity will be honored.
Unrestricted testamentary gifts that are given outside a designated campaign period will be deposited into the Library’s general endowment.
The Board, and/or the Library Director reserve the right to accept (or, in cases where absolutely necessary, to decline) any commitment that is offered to them. They also reserve the right to determine how any commitment will be credited and/or how such commitments will be recognized.
Pledges should be made in writing and should commit to a specific dollar amount that will be paid according to a fixed time schedule. The recommended pledge period is three years, the maximum is five.
4.5.3 Planned Giving
The Library Director or his designates shall have authority to sign planned giving agreements on behalf of the Library. Any agreement that does not meet the requirements of the current guidelines shall require the approval of the Board.
The Library will use the accepted IRS formula (and accounting rules) for determining present value of future planned gifts.
4.5.4 Matching Gifts
A donor whose gift is matched by his/her company will be recognized for the total amount of his/her individual gift plus the matching portion on their gift record. They will receive benefits for the amount of their personal gift and they will receive the name recognition associated with the appropriate gift club for the total amount. The Library will credit an individual donor for the matching gift associated with their personal gift at the time the matching gift form is signed by both the donor and an authorized officer of the Library and is submitted to the corporation. At this time the corporation will also be recognized with the matching gift so that it can be stewarded appropriately.
Individuals making gifts and pledges that are eligible for matching gifts are encouraged to utilize these programs to maximize the value of their gift or pledge to the Library, however, a matching gift cannot be used to fulfill a pledge commitment as the donor has no control over whether that match will be made nor can they legally obligate the company or entity to honor that pledge.
Matching gifts will be recorded as gift income when the matching gift check is received. Matching gifts will only be recorded as pledges if and when an intent to pay/acknowledgement letter is received from the corporation prior to receiving a matching gift check. Gift income reports for each group of constituents (e.g. the Board of Trustees) will include personal gifts only. The associated matching gifts will be reported separately in the matching gift category.
4.5.5 Gift Reporting
All gifts and pledges that fall under the basic principles listed above will be reported to all internal and external constituencies of the Library on an on-going basis according to the gift acceptance policies herein.
The total of outright gifts and written pledges received will be reported at face value. A signed pledge card or letter of intent must be filed with the Library Director before a pledge commitment is reflected on reports. Verbal pledges made by telephone as part of the Fund For Excellence campaign will be allowed. No other verbal pledge commitments will be included in reported totals.
The value of any canceled or unfulfilled pledges must be subtracted from totals after two years of non-response to pledge reminders.
Gifts shall be valued on the date the donor(s) relinquished the control of the assets in favor of the Library.
In cases where gifts are made with assets other than cash, the decision on when to liquidate, report, credit and recognize these assets will be made on a case-by-case basis.
4.5.6 Publicly-traded Securities
Gifts of publicly-traded securities will be reported, credited and recognized at the average of the high and low market value on either: 1) the day of personal delivery of signed certificate and/or stock power; 2) the date the certificate and stock power is mailed; or 3) the day the electronic transfer is received by the Library. Such securities will be conveyed to the Library for sale, consistent with the established policies of the Library.
4.5.7 Closely Held Stock
Gifts of closely held stock exceeding $10,000 in value should be reported at the fair market value placed on them by a qualified independent appraiser. Gifts of closely held stock valued at $10,000 or less will be receipted at the per- share cash purchase price of the most recent transaction. Normally, this will be the buy-back transaction of the donor. If no buy-back is consummated, a gift of closely held stock may be credited at the value determined by a qualified independent appraiser. Appraisals shall be done at the expense of the donor. All such gifts of closely-held stock will be held until liquidated, at which time the funds will be used consistent with the gift intentions of the donor and the established policies of the Library.
4.5.8 Real Estate
Outright gifts of real estate will be credited, recognized and/or commemorated at fair market value at the time it is transferred to the Library, less any encumbrances. The fair market value of the property shall be determined by a qualified independent appraiser in the employ of the donor.
4.5.9 Tangible Personal Property
Outright gifts of tangible personal property for which donors qualify for a charitable gift deduction under current IRS rules will be credited, recognized and/or commemorated at the appraised value of the property at the time it is transferred to the Library, less any encumbrances, so long as the property has been held by the donor for more than one year. If the donor has held the property for less than one year it will be reported, credited and recognized at the level of the original cost basis. Appraisals shall be done at the expense of the donor. Gifts of personal property (jewelry, paintings, antiques, rare books, etc.) exceeding $5,000 in value shall be reported at the fair market value placed on them by an independent, expert appraiser at the time the donor relinquished control in favor of the Library. Appraisals shall be done at the expense of the donor. Gifts of $5,000 and under may be reported at the value declared by the donor or a qualified expert.
Generally, the Library’s acceptance of such gifts cannot involve significant additional expense for their present or future use, display, maintenance, or administration. Unless otherwise authorized by the Board, the Library will seek to liquidate such assets.
The Library will not accept gifts of tangible personal property (such as books, paintings, etc.) if such gifts are to be made on the condition, understanding, or expectation that the gifted items will be loaned to the donor or to persons designated by the donor for life or for an extended period of time as determined by the donor.
4.5.10 In-Kind Gifts
Gifts of materials, products or services, will be accepted when the form of the gift is immediately available and is either directly useable for the mission of the Library or can be used in direct support of an official Library event. Donated services must either create or enhance the non- financial assets of the Library or require skills that would typically need to be purchased if not provided by donation. It is the sole responsibility of the donor to determine the value of the gift for their tax purposes. The Library will count the gift the same as cash at the fair-market value which will be determined in consultation with the donor. The same rules for tax deductibility that apply for gifts of tangible personal property apply to gifts in-kind of materials, products or services. However gifts of volunteer time (services) are not deductible by an individual donor.
Fully paid up, or otherwise vested, insurance policies for which the Library is owner and sole beneficiary will be credited and recorded as “future” expectancies of the Library at the unrealized death benefit (face value) of the policy in cases when the insured is age 65 or greater and at the replacement value for donors younger than 65 or discounted per schedule of actuarial life expectancy.
Gifts of whole life insurance to the Library will be made by either designating the Library as the beneficiary of the policy or as both owner and beneficiary. When the gift is irrevocable because the Library is the owner and beneficiary, the donor shall receive gift credit for the cash surrender value as well as the discounted present value of the unrealized death benefit minus the cash surrender value at the time the policy is transferred. As payments are made to the Library for the policy premiums, they will also be credited to the donor. The Library will report the cash value of the policy as gift income at the time the policy is transferred. The Library will report payments made by the donor for policy premiums as gift income at the time they are received.
Where the Library is named as the beneficiary, but the gift is revocable because the donor still owns the policy, premium payments made directly to the insurance company will be credited and recognized to the donor if the donor sends evidence to the Library of the payment via a cancelled check. The gift will be tracked internally like revocable bequests. No gift income will be reported.
Gifts of term life insurance will be tracked internally like revocable bequests, however no gift income will be reported, credited or recognized unless the policy is executed. Because of the time limits on this type of insurance policy, no donor credit will be given unless the policy is executed.
Bequest intentions, commitments of unpaid insurance policies, and other revocable deferred gifts will be recorded as “future” expectancies of the Library at the value established in writing by the donor through a bequest intention form, a deferred pledge agreement, a contract to make a will, a letter, or a copy of appropriate sections of the will or of the insurance or trust document, etc.
Such revocable gift commitments will be reported, credited and recognized, subject to the donor’s specific request and intent, only when the funds are irrevocably committed to the Library or when the gift matures.
Bequest intentions for which the donor does not indicate a specific gift value and/or does not provide an estimate of residuary bequest will be credited as future expectancies at a minimum value level of $1,000.
Bequests will be credited to campaign attainment figures as received, if not previously credited to another campaign. Such bequests will be credited, recognized and/or commemorated at the value established at the time of probate and/or at the fair market value on the date of the transfer of the asset(s). If any portion of the total amount was previously entered in campaign “future” expectancies as a testamentary pledge, this amount shall be subtracted from what is credited to the “future” reports of a campaign.
New bequest expectancies will be tracked and donors will be recognized at the face value of the bequest, but non- binding, revocable expectancies will not count toward campaign attainment figures.
4.5.13 Gifts Requiring the Expenditure of Funds
All gifts that will, or may, require expenditure of funds either at the time of the gift or at some future date (e.g., non-performing assets gifted to fund a charitable trust or charitable gift annuity, bargain sales, or outright gifts such as real estate that may impose present obligations on the Library) shall require the approval of the Board.
4.5.14 Life Income Agreements
Gift annuities, irrevocable charitable remainder trusts, and similar life income agreement commitments (whether administered by the Library or by others on behalf of the Library) will be credited, recognized and/or commemorated as follows:
At the fair market value of the asset (on the date of transfer, less an encumbrance) being used to “fund” the life income agreement in the case of charitable remainder unitrusts, annuity trusts, and charitable gift annuities for donors age 65 or greater by the end date of a campaign, and at the charitable remainder value for donors younger than age 65, or in the case of charitable lead trusts, at the total anticipated payout over the pledge payment period plus (for commitments made during a campaign period) the present value of any remaining income interest.
A net-income unitrust obligates the trustee to pay only the lower of a specified percent of fair market value or actual income. When such a net income unitrust is used, the Library Director and the donor should sign a separate letter of agreement indicating that the donor understands the income concept of the net income trust.
For purposes of current income tax deductions such gifts will be receipted at the charitable deduction value as established by law.
Generally speaking, the Library does not encourage donors to place encumbered assets into a trust.
4.5.15 Named Endowment Funds
For the purposes of this policy statement, “endowment fund” shall refer to any fund, or any part thereof, not wholly expendable by the Library on a current basis under the terms of the applicable gift instrument.
Endowment funds are invested according to the Library Investment Policy established by the Investment Committee.
Endowment gifts may be used to establish a special endowment fund or may be added to an existing endowment fund.
When establishing an endowed fund, an Endowed Fund Agreement should be used to specify the name of the donor(s) and the amount of the gift, the name of the fund and the donor’s purpose for use of the earnings. This Agreement is dated and executed with the signature of the Library Director or his/her designate and the donor(s) or their approved designates.
In designating an endowment gift for a specific purpose, the donor is encouraged: (a) to describe that purpose as broadly as possible and (b) to avoid detailed limitations and restrictions. In the event the specific purpose is no longer applicable, the Library will apply the funds in a manner consistent with donor intentions and the Library mission.
Gifts to establish a named endowment fund for specific purposes must meet the minimum dollar requirement as established in the Library’s Donor Recognition Policy. The principal amount of the original gift need not meet the minimum dollar requirement if the donor agrees to fully fund the endowment at the minimum dollar requirement within a specified and reasonable period of time.
The minimum dollar requirements established for a named endowment fund ($50,000) shall not apply to any named endowment fund(s) already established at the time these policies are adopted.
The Library reserves the right to review the minimum amounts required for named endowments periodically and to amend the minimum amount required so as to ensure that endowment proceeds are sufficient to fund the intended purpose(s) of the endowment. If, and when the Library acts to increase the minimum amount required to establish a particular named endowment fund, such action shall not be retroactive to funds already established and named.
4.5.16 Donor Responsibilities
Although representatives of the Library will provide all appropriate assistance, the ultimate responsibility regarding asset evaluations, tax deductibility, and/or similar federal, state and/or local legal compliance issues rests with the donor(s) and/or with such financial advisors as the donor(s) shall secure. The Library recommends that all donors consult with their legal tax counsel when planning all gifts, especially non-cash gifts or future planned gifts.
The Library will not knowingly seek, nor accept, any commitment regardless of size, designation or other condition that it believes is not in the potential donor’s best interest.
4.5.17 The Donor Bill of Rights
In accordance with the standards established by the Association of Fundraising Professionals, the Library adheres to the following donor bill of rights.
The Donor Bill of Rights
Philanthropy is based on voluntary action for the common good. It is a tradition of giving and sharing that is primary to the quality of life. To ensure that philanthropy merits the respect and trust of the general public, and that donors and prospective donors can have full confidence in the nonprofit organizations and causes they are asked to support, we declare that all donors have these rights:
• To be informed of the organization’s mission, of the way the organization intends to use donated resources, and of its capacity to use donations effectively for their intended purposes.
• To be informed of the identity of those serving on the organization’s governing board, and to expect the board to exercise prudent judgment in its stewardship responsibilities.
• To have access to the organization’s most recent financial statements.
• To be assured their gifts will be used for the purposes for which they were given.
• To receive appropriate acknowledgement and recognition.
• To be assured that information about their donation is handled with respect and with confidentiality to the extent provided by law.
• To expect that all relationships with individuals representing organizations of interest to the donor will be professional in nature.
• To be informed whether those seeking donations are volunteers, employees of the organization or hired solicitors.
• To have the opportunity for their names to be deleted from mailing lists that an organization may intend to share.
• To feel free to ask questions when making a donation and to receive prompt, truthful and forthright answers.